A Kenya Airways Boeing 787 landing in London. (Photo: AirlineGeeks | William Derrickson) The Coronavirus pandemic and the resulting global entry restrictions have led to an unprecedented slump in demand for air travel and massive revenue declines.
Kenya Airways (KQ) has announced it recorded an unprecedented loss of Ksh36.57 billion (USD329 million) in 2020, a staggering $1 Million loss per day and the worst results in Kenya’s corporate history. The airline also announced it carried a dismal 1.8 Million passengers in 2020, a decline of 65% from 5.1 Million in 2019 and a reflection of a year largely defined by the COVID-19 pandemic.
“Airline passenger traffic reduced to levels last seen in 1999 resulting in 21 years of traffic growth being wiped out in just one year following the government directive to suspend all passenger services to curb the spread of Coronavirus,” said the airline in a statement.
Flight occupancy has dropped on the airline’s routes as individuals and companies canceled events and postponed travel resulting in declined bookings. As a result of the coronavirus pandemic and the ensuing collapse of travel activity worldwide, KQ suffered massive declines in its bookings and its revenues for the 2020 business year.
Last year, the airline embarked on aggressive cost-cutting and cash conservation measures to minimize the pandemic’s impact on the airline. The airline had to renegotiate contracts with suppliers and add extended payment plans in addition to a reduction in distribution.
With the currently renewed lockdown and additional travel restrictions imposed in response to new coronavirus variants, and with the slow progress of vaccination programs, the market situation has tangibly worsened since the beginning of this year.
Nevertheless, the Kenyan government is counting on nationalization to turn around the flag carrier’s fortunes but many believe this move will simply paper over cracks and serve to erase the positive cash balance of the Kenya Airports Authority. The Nairobi Stock exchange suspended the trading of Kenya Airways shares for six months to enable the restructuring and nationalization of the airline to be concluded
But this week parliament rejected moves by the president to appoint a largely government and military-led body, the National Civil Aviation Council (NCAC) that will oversee the National Airline, the country’s regulator and the Airports Authority. Calls have been made for sections of the National Aviation management bill that relate to the creation of the NCAC to be amended with suggestions that its composition should be on […]